Finances can be incredibly stressful, especially when you're having money troubles. If your debt and bills are piling up and you have no way to pay them off, you may want to file for bankruptcy. Filing for bankruptcy may sound frightening, but you don't have to be alarmed. Here are three things you should do before you file.
1. Consider it carefully
According to NOLO, you can only file for bankruptcy once every seven years, and bankruptcy significantly lowers your credit score. Before you file, make sure you've exhausted all your other options first. If you're in debt, call your debtors to see if they'll agree to reduce your debt; they may agree to lower your monthly payments to an amount that you can afford. Ask trusted family members if they would consider giving you a personal loan to help you pay down your debt. If you've already tried these options, then filing for bankruptcy is the next step.
2. Hire a bankruptcy attorney
There is a lot of paperwork involved in filing for bankruptcy, and it can be daunting to face it alone. If you want the peace of mind that comes from knowing your paperwork was expertly prepared, you should invest in a bankruptcy attorney. A good lawyer will advise you and help you maintain realistic expectations of the process; for instance, certain debts, like back child support, will follow you even after bankruptcy. Remember to be completely honest with your attorney. They need to know all the relevant information about your financial situation so that they can provide accurate assistance.
3. Get your finances under control
Sometimes you need to file bankruptcy for reasons outside of your control. Emergencies, natural disasters, and other unforeseen circumstances can drain your finances and leave you in the lurch. However, this is a good opportunity to examine your finances. If you have areas where you're overspending, figure out how to rein it in. You may want to reexamine your budget, and a financial planner can assist you with this if you need help. Do everything you can to ensure you won't end up in the same situation again.
Filing for bankruptcy doesn't need to be nerve-wracking or embarrassing. This can be a difficult time, but with some knowledge and the help of a bankruptcy law attorney, you'll be able to get through it. Bankruptcy can be very relieving since it frees you from the stress and worry of debt. These are just a few of the things you should keep in mind before you file for bankruptcy.